The European Commission has reduced planned tariffs on Tesla vehicles made in China after the electric vehicle maker run by Elon Musk cooperated with EU authorities in an ongoing subsidy investigation against Chinese car companies.

The Commission announced that it would now impose tariffs of 9 percent on Tesla vehicles manufactured in China, up from 20.8 percent previously.

Some Chinese car manufacturers that operate joint ventures with EU car manufacturers could also be subject to lower punitive tariffs than previously stated, the Commission said.

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EU authorities have been investigating Chinese electric vehicle manufacturers since last year. There are suspicions that they are flooding the European market with cheap cars manufactured with “unfair” financial support from Beijing.

The investigation came at a time when Chinese brands such as Nio and BYD were blocking their expansion into the European market amid declining demand for electric vehicles in China.

In July presented the results of his investigation and announced that it would impose tariffs of up to 37.6% on electric vehicles made in China.

The duties are in addition to the EU standard tariff of 10% on car imports.

However, analysts believe that even with the additional tariffs, Chinese electric vehicles would remain far cheaper than those of local competitors.

Visit to the Tesla factory

The tariff adjustment for Tesla came after the electric car giant asked the Commission to recalculate its tariff rate based on the specific subsidies the company had received.

Last month increased the prices of its Model 3 cars in European countries including Germany, the Netherlands and Spain, by about 1,500 euros (1,622 dollars), citing new EU tariffs.

The Commission said it had conducted an investigation and, among other things, sent a team to Tesla’s facilities in China to check what subsidies the company had received.

Brussels ultimately concluded that Tesla received fewer subsidies from Beijing than other Chinese electric car manufacturers, a Commission official said.

Shorter grace periods for Chinese companies

An EU official said on Tuesday that they still believe that Chinese production of electric vehicles has benefited from extensive subsidies.

The Commission has now proposed slightly lower definitive duties of up to 36.3 percent for companies that did not cooperate in the EU’s anti-subsidy investigation.

Chinese companies in joint ventures with EU manufacturers could also be entitled to the lower tariff rates provided for the Chinese company in which they are integrated – instead of automatically receiving the highest tariff rate, the Commission said.

On Tuesday, it was announced that slightly lower provisional tariffs would apply to the three companies under investigation. The rate for the Chinese electric car giant BYD was 17.0 percent, for Geely 19.3 percent and for SAIC 36.3 percent.

In July, the Commission imposed provisional tariffs of between 17.4 and 37.6 percent, exceeding the EU’s standard tariff of 10 percent on car imports. For BYD, the additional rate was 17.4 percent, for Geely 19.9 percent and for SAIC 37.6 percent.

The tax rate is highest for SAIC, a state-owned Chinese car manufacturer, because the company is unwilling to cooperate in the investigation, the Commission said earlier.

Meanwhile, Chinese car manufacturers demanded countermeasures such as tariffs of 25 percent on European imports of gasoline cars.

They also accused European officials of Using the probe as a means to “spy” on their technology by asking for “core secrets” such as battery composition, supplier information and other “trade secrets”.

• Reuters, with additional contributions from Vishakha Saxena

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